HomeMy WebLinkAboutAudit - 2019-06-24AUDIT COMMITTEE MINUTES
JUNE 24, 2019
The Audit Committee met this date commencing at 12:37 p.m.
CITY OF KITCHENER
Present: Mayor B. Vrbanovic - Chair
Councillors J. Gazzola, S. Davey, P. Singh, M. Johnston, D. Schnider, D. Chapman, S.
Marsh, K. Galloway-Sealock, and C. Michaud.
Staff: D. Chapman, Chief Administrative Officer
M. May, Deputy CAO, General Manager, Community Services
J. Readman, General Manager, Development Services
J. Lautenbach, Chief Financial Officer, Financial Services
D. McGoldrick, General Manager, Infrastructure Services
V. Rabb, General Manager, Corporate Services
B. Johnson, Director of Accounting, Financial Services
R. LeBrun, Manager of Accounting, Financial Services
S. Brisbane, Supervisor, Financial Reporting
C. Tasker, Internal Auditor
A. Buchholtz, Associate Procurement Specialist
D. Saunderson, Committee Administrator
FIN -19-059 - 2018 AUDITED FINANCIAL STATEMENTS
The Committee considered Finance and Corporate Services Department report FCS -19-059,
dated June 14, 2019, to which was attached the "City of Kitchener Financial Report for the
Year Ended December 31, 2018" and the KPMG report entitled "Audit Findings Report for the
year ending December 31, 2018".
Councillor S. Davey entered the meeting at this time.
Ms. S. Brisbane presented the Financial Report and provided an overview of the municipal
financial condition as of December 31, 2018. She highlighted the differences between the
operating and enterprises results in March 2019 to those included in the 2018 Audited
Consolidated Financial Statements. She provided a comparison of Kitchener's debt to reserve
ratio and financial position per capita to other Ontario municipalities. She further advised the
City should continue to reduce debt, build reserve balances, retain long-term investments and
focus on asset renewal to maintain its strong financial position.
Councillor D. Schnider entered the meeting at this time.
In response to questions, Ms. Brisbane advised the Gas Utility was included in the reserves to
expenses, noting she could provide additional information on those figures save and except
the Gas Utility.
Mr. M. Betik and Ms. C. Cheal, KPMG, the City's external Auditor, were in attendance to
present the Audit Findings Report for the year ending December 31, 2018. Mr. Betik provided
an overview of the external audit process of the consolidated financial statements, indicating
the reports were clean and there were no misstatements were identified during the audit.
Councillor C. Michaud left the meeting at this time.
On motion by Councillor S. Davey -
it was resolved:
"That the 2018 Audited Consolidated Financial Statements of the City of Kitchener be
approved, as outlined in Financial Services Department report FIN -19-059."
2. CAO -19-009 - SECOND QUARTER AUDIT STATUS REPORT
The Committee considered Chief Administrative Office report CAO -19-009 entitled "2nd Quarter
Audit Status Report", dated April 6, 2018, providing a summary of the internal audit activities
completed from March to June, 2019.
AUDIT COMMITTEE MINUTES
JUNE 24, 2019 - 3 - CITY OF KITCHENER
2. CAO -19-009 - SECOND QUARTER AUDIT STATUS REPORT (CONT'D)
Ms. C. Tasker presented the report, advising the intention of the presentation this date was to
provide a follow-up on three previously completed audits, including their status to date: SAP
Separation of Duties; Employee Expenses; and, Office of the Mayor and Council
reorganization. Ms. Tasker further advised both the SAP Separation of Duties and Employee
Expenses will remain on the Internal Audit list for periodic compliance testing.
Councillor M. Johnston entered the meeting at this time.
In response to questions, Ms. V. Rabb advised the Office of the Mayor and Council, Chief of
Staff is currently undertaking a secondary review of other municipalities with similar
organizational structures as Kitchener's Office of the Mayor and Council, also taking into
consideration the needs of the current Council. She advised all members of Council will be
requested to provide their feedback as part of that review and staff anticipate bringing forward
a report with any recommendations arising from that review.
FIN -19-058 - P19-024 AUDIT SERVICES
The Committee considered Finance and Corporate Services Department report FCS -18-012,
dated June 4, 2018, recommending approval to award KPMG LLP, Waterloo, Ontario as the
City's external auditor for a 5 -year term. Mr. J. Lautenbach was in attendance and responded
to questions from the Committee.
It was noted any recommendation arising from this matter would be considered at a Council
meeting scheduled for later this date.
On motion by Councillor K. Galloway-Sealock -
it was resolved:
"That Proposal P19-024 Audit Services, be awarded to KPMG LLP, Waterloo, Ontario,
at their estimated fee of $777,600., plus H.S.T. of $101,088., for a total of $878,688., for
a five (5) year term beginning with the fiscal year ending December 31, 2019 for the
Corporation of the City of Kitchener, it's boards and enterprises, Kitchener
Housing Inc., and Kitchener Non -Profit Property Management Inc. and for a five (5)
year term beginning with the fiscal year ending May 31, 2020 for Waterloo Region
Municipalities Insurance Pool, as outlined in Financial Services Department report FIN -
19 -058; and further;
That section 1.1 of Chapter 103 (Auditor) of the City's Municipal Code be
amended to effect the appointment of KPMG LLP as the City's Auditor."
CA •il>11001NLl LVA 1:11Ll111
This meeting adjourned at 1:42 p.m.
D. Saunderson
Committee Administrator